Microsoft wants to double its advertising revenue from $10 billion a year to $20 billion. Leadership didn’t specify a time frame, but if it hits their goals, it will become the world’s sixth-largest digital ad seller.
Multiple advertising properties of Microsoft. Microsoft’s advertising properties include Bing Search, Xbox, MSN and many other sites that use Xandr to sell digital ads. Microsoft also launched vertical ad formats, credit card ads, and expanded its Audience Network to 66 new markets.
Search and news revenue rose 16%. Microsoft reported that their FY23 Q1 advertising revenue increased by 16%. But Chief Financial Officer Amy Hood told analysts on the earnings call that “reductions in client ad spend also subsided later in the quarter, impacting Ad Search and LinkedIn Marketing Solutions.”
But the growth in search and advertising was “driven by higher search volume and Xandr.” Nadella said Microsoft “nearly quadrupled the geographic reach we serve over the past year.” Microsoft Edge may also help Bing search and ad revenue. “Edge is the fastest-growing browser on Windows and continues to gain share as people save money using built-in coupons and price comparison features,” Nadella said.
Rob Wilk, vice president of Microsoft Advertising, said he intends to make it easier for partners to buy ads across properties. “We have a lot of plumbing to do,” he said in an October interview. “Microsoft also needs to differentiate itself from competitors with similar attributes but with a more established advertising business, such as Google. Microsoft is more “partner-oriented” than Google, Wilke said.
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Netflix. The new Netflix partnership, launched this month, allows advertisers to buy ads through the demand-side platform Xandr. Microsoft will charge reseller fees, and experts predict the partnership will be a huge revenue driver, easily generating $10 billion or more in ad sales.
gamble. Another important source of revenue for Microsoft is games. The Activision Blizzard acquisition is still up in the air, but in-game ad revenue could be a unique selling point if ads can be bought through Xandr.
Dig. You can read the full article from Business Insider here.
Why do we care. As Microsoft’s advertising business grows, it means more opportunities for advertisers looking to expand their reach beyond Google and Facebook. Additional options such as in-game advertising, Netflix, and the demand-side platform Xandr will open the door for publishers and brands.
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